Expanded Rochester Mine Achieves Mid-Year Target Run Rates

Rhea-AI Summary

Coeur Mining has announced the successful completion of ramp-up activities at its Rochester silver and gold mine in Nevada. The mine now achieves a daily throughput rate of 88,000 tons, positioning it to significantly impact the company's financials in the second half of the year. The ramp-up marks a milestone, with 4.3 million tons of ore placed on the new Stage 6 leach pad in Q2, totaling 15.5 million tons. Despite lighter-than-planned crushing and placement rates, mining rates exceeded expectations.

Coeur forecasts throughput levels to reach approximately 32 million tons annually at full capacity, making Rochester one of the largest open pit heap leach operations globally and the largest domestic source of refined silver. The company will release its Q2 2024 operational and financial results on August 7, 2024, followed by a conference call on August 8, 2024.

Positive

• Successful completion of ramp-up activities at Rochester mine.
• Achieving a daily throughput rate of 88,000 tons.
• Projected increase in free cash flow in the second half of the year.
• Expected annual throughput of 32 million tons at full capacity.
• Rochester is anticipated to become the largest domestic source of refined silver.

Negative

• Crushing and placement rates were lighter than initially planned during Q2.

Insights

Mining Analyst

The completion of the ramp-up activities at Coeur Mining's Rochester mine to a daily throughput rate of 88,000 tons signifies a major operational milestone. This expansion positions Rochester as one of the world’s largest open pit heap leach operations. Heap leaching is a process where precious metals are extracted from ore by dissolving them in a chemical solution. This method is particularly cost-efficient for large-scale, low-grade ore bodies.

Operational Implications: Achieving this scale indicates enhanced operational efficiency, which translates to higher production volumes and potentially lower operational costs per ounce of silver and gold produced. This is important in a commodity-driven industry where economies of scale can significantly impact profitability.

Long-term Impact: The stated goal of generating free cash flow during the second half of the year is pivotal. Free cash flow is the cash generated by the company after accounting for capital expenditures necessary to maintain or expand its asset base. This positive cash flow can be used to reduce debt, invest in further growth, or return capital to shareholders. This achievement could aid in improving the company's balance sheet stability and financial health.

Considerations: While the throughput rates are promising, it’s essential to monitor the consistency of these rates and the actual realized production versus expectations. Any disruptions or inefficiencies in the process could impact the projected outcomes.

Financial Analyst

Coeur Mining's announcement has profound financial implications. The expected shift to positive free cash flow in the second half of the year is particularly noteworthy. Generating free cash flow means the company is now producing more cash than it needs to run its operations and invest in its future, allowing it to reduce debt levels. This is a critical metric for investors as it indicates the company's ability to return value to shareholders either through debt reduction, dividends, or share buybacks.

Debt Reduction: Reducing debt levels will improve the company's leverage ratios, which is a positive sign for credit ratings and can reduce future interest expenses, enhancing profitability. Improved leverage ratios also provide greater financial flexibility and resilience against market volatility.

Investor Confidence: Achieving operational targets and moving towards free cash flow generation can boost investor confidence. It demonstrates effective management and operational efficiency, which may be reflected in the stock price performance.

Future Earnings: Investors should look forward to the upcoming financial results on August 7, 2024, for detailed insights into how these operational milestones translate into financial performance. A key aspect to watch is the revenue growth and any updates on cost management that could signal future profitability trends.

Operation now routinely achieving targeted daily throughput rate of 88,000 tons per day

CHICAGO--(BUSINESS WIRE)-- Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported that its recently-expanded Rochester silver and gold mine in Nevada successfully completed ramp-up activities at the end of the second quarter by achieving daily throughput rates of over 88,000 tons per day.

“With the ramp-up to steady-state throughput now achieved, Rochester is expected to lead the Company to a free cash flow inflection point during the second half of the year, which will enable the Company to reduce debt levels,” said Mitchell J. Krebs, Chairman, President and Chief Executive Officer. “The team has worked tirelessly to complete the ramp-up and will now turn its focus to a range of optimization efforts while establishing an operating rhythm at the higher mining, crushing, and placement rates now being achieved.”

Approximately 4.3 million tons of ore were placed on the new Stage 6 leach pad during the second quarter bringing the total tons placed to 15.5 million tons. Crushing and placement rates were lighter than initially planned during the second quarter while mining rates exceeded plan. Down days taken during the second quarter have Rochester well positioned to deliver crushing and placement rates of 7 – 8 million tons per quarter during the second half of the year and into 2025.

At full capacity, throughput levels are expected to be approximately 2.5 times higher than historical levels, or approximately 32 million tons per year, making Rochester one of the world’s largest open pit heap leach operations and America’s largest source of domestically produced and refined silver.

The Company will report its second quarter 2024 operational and financial results after the New York Stock Exchange closes for trading on Wednesday, August 7, 2024. The Company will be hosting a conference call at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Thursday, August 8, 2024.

About Coeur

Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals producer with four wholly-owned operations: the Palmarejo gold-silver complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska and the Wharf gold mine in South Dakota. In addition, the Company wholly-owns the Silvertip polymetallic critical minerals exploration project in British Columbia.

Cautionary Statements

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding the Company’s anticipated production, cash flow, debt repayment, ramp-up, operations, expectations and initiatives at Rochester, including the Rochester expansion project. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the risk that anticipated production, cost, expense and free cash flow levels are not attained, the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically-related conditions), changes in the market prices of or demand for gold and silver and a sustained lower price or higher treatment and refining charge environment, the uncertainties inherent in Coeur’s production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, changes in mining laws, ground conditions and, grade and recovery variability, any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), the uncertainties inherent in the estimation of mineral reserves, changes that could result from Coeur’s future acquisition of new mining properties or businesses, the loss of access or insolvency of any third-party refiner or smelter to which Coeur markets its production, the potential effects of future pandemics, including impacts to the availability of our workforce, continued access to financing sources, government orders that may require temporary suspension of operations at one or more of our sites and effects on our suppliers or the refiners and smelters to whom the Company markets its production and on the communities where we operate, the effects of environmental and other governmental regulations and government shut-downs, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur’s most recent reports on Form 10-K and Form 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities. This does not constitute an offer of any securities for sale.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240711354220/en/

Coeur Mining, Inc.

Jeff Wilhoit, Director, Investor Relations

(312) 489-5800

www.coeur.com

Source: Coeur Mining, Inc.

FAQ

What recent milestone has Coeur Mining's Rochester mine achieved?

Coeur Mining's Rochester mine has achieved a daily throughput rate of 88,000 tons, completing its ramp-up activities.

How much ore was placed on the new Stage 6 leach pad at Rochester mine in Q2 2024?

Approximately 4.3 million tons of ore were placed on the new Stage 6 leach pad in Q2 2024.

What is the expected annual throughput for the Rochester mine at full capacity?

The expected annual throughput for the Rochester mine at full capacity is approximately 32 million tons.

When will Coeur Mining report its Q2 2024 results?

Coeur Mining will report its Q2 2024 operational and financial results on August 7, 2024.

What is the expected impact of Rochester mine's ramp-up on Coeur Mining's financials?

The ramp-up is expected to lead Coeur Mining to a free cash flow inflection point in the second half of the year, enabling the company to reduce debt levels.

What were the crushing and placement rates at Rochester mine during Q2 2024?

Crushing and placement rates were lighter than planned during Q2 2024, but mining rates exceeded expectations.